Software AG: Software AG enters into Investment Agreement with Silver Laketo support long-term growth

Darmstadt (pta003/22.04.2023/00:14 UTC+2)

• Silver Lake to launch voluntary public tender Offer to all shareholders of Software AG at a price of €30.00 per share, representing an attractive premium of 53 percent to the XETRA closing price on 20 April 2023 and of 48 percent to three-month volume-weighted average share price
• The Management Board and the Takeover Committee on behalf of the Supervisory Board welcome the deepened strategic partnership with Silver Lake and support the voluntary public tender Offer
• The Software AG Foundation is in full support of the Offer and has signed a share purchase agreement to sell 25.1 percent of all shares to Silver Lake, underlining the attractiveness of the Offer
• Silver Lake to support Software AG on focusing its business towards the cloud application and data integration market and transitioning to a Software-as-a-Service (SaaS)-first company
• The intention of Silver Lake is to delist Software AG's shares
• Q1 2023 trading in line with market expectations across all guidance metrics, 2023 full year guidance reconfirmed and updated medium term outlook

Darmstadt, Germany – April 21, 2023: Software AG (the "Company"; Frankfurt TecDAX®: ISIN DE000A2GS401) has today signed an investment agreement with Blitz 22-449 SE (the "Investor"), a holding company controlled by funds managed or advised by Silver Lake Technology Management, L.L.C. ("Silver Lake"), to deepen its existing strategic partnership with Silver Lake and support the long-term growth and strategic objectives of the Company. In this context, Blitz 22-449 SE has announced its intention to launch a voluntary public tender Offer (the "Offer") at an Offer price of €30.00 per share in cash for all outstanding shares of Software AG (the "Offer Price"). The Software AG Foundation is fully supportive of the Offer and has signed a purchase agreement to sell 25.1 percent of all shares to Silver Lake.

The Offer Price would represent an attractive premium of 53 percent to the XETRA closing price of Software AG shares on 20 April 2023. It would also offer a substantial premium of 48 percent to the three-month volume-weighted average share price. It would imply an equity value of Software AG of approximately €2.2 billion.

The Company's Management Board and the Takeover Committee on behalf of the Supervisory Board welcome the deepened strategic partnership with Silver Lake and have therefore resolved to support the Offer. Subject to the careful review of the Offer document, the Management Board and the Takeover Committee on behalf of the Supervisory Board of Software AG intend to recommend acceptance of the Offer in their reasoned statement.

The Offer is subject to an acceptance threshold of 50 percent plus one share and further customary conditions, including regulatory clearances. The transaction is fully funded with equity and debt financing in place.

Foundation to sell 25.1 percent of all outstanding shares

The Software AG Foundation, the Company's largest investor, is in full support of the Offer and has signed a share purchase agreement with the Investor to sell 25.1 percent of all shares. This underlines the attractiveness of the cash Offer to current shareholders, who have the opportunity to realize a substantial part of the planned multi-year and investment-heavy value creation journey upfront. The Software AG Foundation will continue to own 5 percent of shares. The retained 5 percent of shares are subject to a lock-up.

Software AG and Silver Lake first signed a partnership in 2021, when Silver Lake supported the Company with an investment of €344 million to drive Software AG's Helix transformation, with Silver Lake representatives Christian Lucas and James Whitehurst joining Software AG's Supervisory Board. Silver Lake has strongly supported the Company's strategic vision in focusing on the cloud application and data integration market, transitioning to a SaaS-first business and in exploring M&A opportunities. Silver Lake's proven expertise in all three of these areas in particular has accelerated the Company's strategic transformation progress and positions it as the ideal partner for the next phase of Software AG's multi-year transformation amidst a challenging macroeconomic environment and considering the required operational and financial long-term investments.

Sanjay Brahmawar, Software AG CEO, commented: "The Management Board welcomes the opportunity of a deepened strategic partnership with Silver Lake, following a thorough analysis of the Offer. Silver Lake has already demonstrated strong support for our strategic vision and values. With deep expertise in the integration market, experience in transitioning businesses to SaaS-first models and extensive M&A capabilities, Silver Lake is a valuable long-term partner for Software AG and our customers. A successful transaction would enable us to accelerate the execution of our strategy, double down on innovation in integration for customers, and provide greater opportunities to attract and develop talent. We would like to thank the Foundation and Dr Schnell for the many years of support in contributing to where Software AG is today."

Daniela Bünger, Software AG CFO, commented: "The offer of €30.00 per share represents an attractive premium for our shareholders. The commitment of the Software AG Foundation as the company's largest investor to sell 25.1 percent is testament to the attractiveness of the cash offer. Ahead of our full financial results announcement next Thursday, I can confirm that all guidance metrics in the first quarter are in line with market expectations and reconfirm our full year guidance for 2023."

Dr. h. c. Peter Schnell, CEO of the Foundation and co-founder and former CEO of Software AG, said: "We welcome the proposed acquisition of Software AG by Silver Lake. Silver Lake have been great partners to Software AG and to us since their initial investment, and through working together on the future of the company we have developed a deep and trusted relationship. We leave Software AG under the good stewardship of Christian Lucas, Silver Lake and the Management Board, whom we wish all the best as they embark on transforming the company over the next years. They have our full support and encouragement."

Q1 trading update confirms market expectations and full year guidance

The Group confirms that it will announce full financial results for the first quarter of 2023 on Thursday, April 27, 2023, as previously disclosed. All guidance metrics in the first quarter are in line with market expectations and Software AG reconfirms its full year guidance for 2023 across all metrics.

Software AG remains committed to double-digit revenue growth in the Digital Business segment and reiterates its ambition to reach an operating profit margin in the high twenties in the medium term which will translate into improved cash flow generation.

Software AG's Q1 performance and medium term ambitions follow the Company's strategic transformation under Helix over the last four years. Software AG's strategic vision is centered on the cloud application and data integration market, transitioning to a SaaS-first business and in exploring M&A opportunities. In considering the Offer, the Management Board reviewed investment into product and go-to-market strategy, as well as the broader market environment for digital transformation.

In light of Silver Lake's role on the Supervisory Board, Christian Lucas and James Whitehurst have recused themselves from the process and an independent Takeover Committee consisting of Madlen Ehrlich, Oliver Collmann and Ursula Soritsch-Renier has been created.

PJT Partners is acting as financial advisor and Clifford Chance is acting as legal advisor to Software AG. Gleiss Lutz is acting as legal advisor to the Supervisory Board.

Conference call

A webcast for investors and financial analysts will take place on 24 April, 2023, at 9.00 am CEST (8.00 am BST). Please pre-register to receive dial-in details at Software AG's IR website.

About Software AG

Software AG simplifies the connected world. Founded in 1969, it helps deliver the experiences that employees, partners and customers now expect. Its technology creates the digital backbone that integrates applications, devices, data and clouds; empowers streamlined processes; and connects "things" like sensors, devices and machines. It helps 10,000+ organizations to become a truly connected enterprise and make smarter decisions, faster. The Company has about 5,000 employees across more than 70 countries and annual Group revenue of more than €950 million.

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About Silver Lake

Silver Lake is a global technology investment firm, with more than $95 billion in combined assets under management and committed capital and a team of professionals based in North America, Europe and Asia. Silver Lake's portfolio companies collectively generate more than $282 billion of revenue annually and employ more than 713,000 people globally. For more information about Silver Lake and its portfolio, please visit http://www.silverlake.com.

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Disclaimer

This document is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell securities. The voluntary public takeover offer for the outstanding ordinary shares (including ordinary shares represented by American depositary receipts) of Software AG (together with its consolidated subsidiaries, the "Software AG Group") has not commenced. The terms and conditions of the takeover offer will be published in, and the solicitation and offer to purchase ordinary shares (including ordinary shares represented by American depositary receipts) will be made only pursuant to the offer document and related offer materials prepared by Silver Lake and as approved by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, "BaFin"). Once Silver Lake has obtained the necessary permission from BaFin, the offer document and related offer materials will be published in Germany; in addition, Software AG's Management Board and Supervisory Board will publish a statement pursuant to Sec. 27 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG). The offer document for the takeover offer (in German and in English) containing the detailed terms and conditions of, and other information relating to, the takeover offer will, among other things, be published on the internet at www.offer-2023.com.

Acceptance of the takeover offer by shareholders that are resident outside Germany and the United States may be subject to further legal requirements. With respect to the acceptance of the takeover offer outside Germany and the United States, no responsibility is assumed for the compliance with such legal requirements applicable in the respective jurisdiction.

The Tender Offer Statement (including the offer document, a related letter of transmittal and other related offer materials) and any related statement, as they may be amended from time to time, as well as the Management and Supervisory Board's statement pursuant to Sec. 27 WpÜG will contain important information that should be read carefully before any decision is made with respect to the takeover offer because they, and not this document, will govern the terms and conditions of the takeover offer.

This document constitutes neither an offer nor recommendation to subscribe or buy in any other way securities of Software AG or any of the companies that are members of the Software AG Group at present or in the future, nor does it form part of such an offer and it should not be understood as such. This document does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities in the United States of America or in any other jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such offer or solicitation. Securities of Software AG may not be offered or sold in the United States of America without registration or exemption from registration in accordance with the U.S. Securities Act of 1933, as amended.

Cautionary statement regarding forward-looking statements

This document contains forward-looking statements, including statements regarding the expected consummation of the proposed transaction and Software AG's future performance, which involves a number of risks and uncertainties, including the satisfaction of closing conditions for the transaction, the possibility that the transaction will not be completed, the failure to retain key Software AG employees, customers and partners, uncertainty regarding the anticipated benefits of the transaction and the failure of the parties to achieve anticipated goals of the transaction, and other risks and uncertainties discussed in Software AG's public disclosure, as well as the offer document to be filed by Silver Lake and the statement pursuant to Sec. 27 WpÜG to be published by Software AG's Management and Supervisory Board. These documents and statement are based on current expectations, assumptions, estimates and projections, and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Software AG and Silver Lake, that may cause results, levels of activity, performance or achievements to be materially different from any future statements. These statements are generally identified by words or phrases such as "believe", "anticipate", "expect", "intend", "plan", "will", "may", "should", "estimate", "predict", "potential", "continue" or the negative of such terms or other similar expressions. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results and the timing of events may differ materially from the results and/or timing discussed in the forward-looking statements, and you should not place undue reliance on these statements. Software AG undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise, unless expressly required to do so by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

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Emitter:	Software AG Uhlandstraße 12 64297 Darmstadt Germany
Contact Person:	Investor Relations
Phone:	+49 615192 1900
E-Mail:	Investor.Relations@softwareag.com
Website:	www.softwareag.com
ISIN(s):	DE000A2GS401 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Dusseldorf, Hamburg, Hannover, Munich, Stuttgart, Tradegate